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Tuesday, February 3, 2015

How Do You Pay For Your Project Management Leadership?

I started a conversation yesterday with colleague in the healthcare and life science industries (in particular on the service/consulting side of the table). Most of you are aware that I’ve been on both sides of the table (as a project manager for both life science and healthcare companies). During the discussion, the question was raised about the value of having an in-house (overhead count) project manager versus a contract (consultant and/or a nested contractor) employee. Here are a few of the points made and I wanted to open the conversation to you in hopes of compiling a 360-degree comprehensive perspective on the matter.

HEALTHCARE & LIFE SCIENCE PROJECT MANAGERS (IN-HOUSE PERSONNEL CHARGED TO OPERATING EXPENSE)

 

PROS:

  1. Individual has a better grip on the underlying company goals as well as any bureaucratic limitations that should be considered since they will probably directly or indirectly impact the schedule and budget
  2. Individual will probably have a better grip on the company and industry QA/QC requirements
  3. Individual would be easily accessible to train the maintenance personnel as well as troubleshoot warranty or routine preventative maintenance events

CONS:

  1. Individual probably has experience limited to their current employer (and any predecessor employers)
  2. There is no tangible/factual base to constructively challenge design/construction limitations (i.e. how do you know that the job has been designed/constructed/billed for the minimal amounts needed to ensure QA/QC compliance while still implementing the appropriate LEED initiatives to improve the total cost of ownership during normal operations?)
  3. Unless there is an approved master plan that forecasts future capital projects, companies struggle to keep the in-house project manager busy enough to justify the overhead cost

HEALTHCARE & LIFE SCIENCE PROJECT MANAGEMENT CONSULTANT (OWNER’S REPRESENTATIVE CHARGED TO CAPITAL PROJECT VERSUS OVERHEAD)

 

PROS:

  1. Individual has a better grip on the national and/or global best practice initiatives related to various project delivery methods (design/bid/build, design/build, accelerated integrated design/build on a cost-plus value that also includes a guaranteed maximum price)
  2. Individual will probably have a more robust (wider) pool of colleagues to leverage for focused issues related to QA/QC, operational flow, regulatory, cost-trending analysis to ensure that the submitted pricing is reflective of the market conditions (so the Owner/Client is assured that the job is being built as fast as possible while still costing the bare minimum)
  3. Individual doesn’t cost the company once the project is completed, but is still accessible for troubleshooting and other miscellaneous needs

CONS:

  1. Individual probably does not fully understand the underlying internal issues related to quality, cost, and time
  2. Individual has a ramp-up time to build the necessary team trust and good-will that is critical to ensuring a successful project
  3. Some may interpret the cost of the consultant as unnecessary and unjustified relative to using the in-house project management staff (consultant cost could range from anywhere from 2% – 8% of the guaranteed maximum price for construction depending on the project scope details)
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Author: Troi Taylor
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